The area HBO once dominated is being quickly surpassed by Netflix: Stand-up comedy

Netflix announced today it had signed a new, exclusive deal with Louis C.K. for two new stand-up specials, making the Louie creator the latest comedian to join the company’s growing slate of talent.

Prior to Netflix signing the deal with C.K., the company made similar deals with Chris Rock, Dave Chappelle, Jerry Seinfeld, Amy Schumer, Patton Oswalt and David Cross. Based on reports, Netflix shelled out anywhere from $20 million to $100 million to secure their talents. In doing so, Netflix made its intentions very clear: It wants to become the comedy giant that HBO made itself known for from its early years into the late ‘90s.

Between 1994 and 1999, HBO had a show called the HBO Comedy Half-Hour. It was exactly what the title promised and featured a new comedian every week. Between those years, Chappelle, Rock, C.K., Oswalt and Cross would all make appearances on the show, skyrocketing their careers into the spotlight. HBO was the home of comedy, being the go-to network for comic greats like Richard Pryor and George Carlin. It distinguished itself from other networks by showing the type of stand-up specials broadcast and basic cable just couldn’t carry because of FCC guidelines.

HBO still carries stand-up specials — including one from Schumer in 2015 — but the network isn’t the comedy giant it once was. It’s not focusing as much attention on its specials as it used to. Last year, HBO released three stand-up specials: Whitney Cummings’ I'm Your Girlfriend, Quincy Jones’ Burning the Light and Pete Holmes’ Faces and Sounds. In comparison, HBO had two programs dedicated to stand-up comedy in 1997 along with multiple feature-length specials.

Netflix last year released 25 stand-up specials, making it one of the top networks to dedicate time and money to the specific genre of comedy. Netflix’s chief content officer Ted Sarandos confirmed in 2016 the company was going to spend about $6 billion on producing more original content. A large part of that budget seems to be allocated toward stand-up specials, so the question is why does Netflix want to pursue an area that other networks are walking away from?

It’s a good question and there are a couple of explanations. The fun answer, which seems the least likely, is that Netflix wants to beat its major competitor at one of its most beloved blocks of programming. The other, which is far more likely, is that Sarandos and other Netflix executives see a space opening for the network to move into.

Aside from Showtime and streaming services like Seeso, no one else is spending as much money on stand-up specials. It’s not hard to see why, either. Stand-up specials can be expensive and — in the age of YouTube — aren’t a guarantee when it comes to return on investment. More networks are backing away from focusing on stand-up, instead ordering more series or original films that they can sell to advertisers. It’s crucial to note that Netflix does not release numbers for any of its shows. We have no idea how many people are watching the stand-up specials.

Netflix, a rare internet network, doesn’t have to worry about advertisers. Its revenue is based solely on subscriptions and that’s growing. In January, Netflix’s CEO Reed Hastings confirmed the company saw a huge growth in subscribers during its fourth quarter in 2016, with more than 7.05 million people joining the service. As a result, revenue grew and stocks surged by more than 8 percent.

What does all of this mean? Essentially, Netflix has the time and the money to play around and experiment. It can figure out if comedy is something it wants to pursue without worrying about blowback from Nielsen ratings and advertisers. Netflix gets to become the kind of comedy, if it so wants, without ever having to worry about how the rest of the company holds up.

It’s an interesting time to be a fan of stand-up — and perhaps one of the most fruitful. There are new specials being added every month by Netflix, with no sign of slowing down from the company. With executives willing to pay to have the biggest names in the industry sign exclusive deals with the company, Netflix’s comedy section looks like it’s only going to continue growing.

HBO has already conceded defeat.